Edensoft Holdings Limited (1147) AI Stock Analysis

• Market Cap: HK$286.29M
• Dividend Yield: 1.49%
• Average Volume (3M): 9.36M
• Price to Earnings (P/E): 23.7
• Beta (1Y): 0.64
• Revenue Growth: 28.18%
• EPS Growth: 47.50%
• Country: HK
• Employees: 231
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): <0.01
• Shares Outstanding: 2,044,947,400
• 10 Day Avg. Volume: 10,799,000
• 30 Day Avg. Volume: 9,355,000
• PEG Ratio: 0.57
• Price to Book (P/B): 0.68
• Price to Sales (P/S): 0.12
• P/FCF Ratio: 1.45
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 55 Neutral
• Price Target: HK$0.12 ▼(-10.77% Downside)

Edensoft Holdings Limited's overall stock score is driven by its strong financial performance, despite cash flow challenges, and a bearish technical outlook. The valuation is moderate, but the stock's oversold condition may present a potential buying opportunity if operational improvements are realized.

Positive Factors

Revenue Growth

Strong revenue growth indicates the company's successful market expansion and product adoption, supporting long-term business sustainability.

Balance Sheet Health

Low leverage enhances financial stability, providing flexibility for future investments and shielding against economic downturns.

Profitability Improvement

Transition to positive EBIT reflects improved operational efficiency and profitability, strengthening the company's financial foundation.

Negative Factors

Cash Flow Challenges

Negative cash flows indicate potential liquidity issues, which could constrain the company's ability to invest in growth and manage debt.

Low Margin Levels

Low margins suggest limited pricing power and cost control, which may hinder profitability and competitive positioning in the long term.

Modest Return on Equity

A modest return on equity indicates underutilization of shareholder capital, potentially impacting investor confidence and future capital raising.

Edensoft Holdings Limited Business Overview & Revenue Model

Company Description

Edensoft Holdings Limited, an investment holding company, operates as an integrated IT solution and cloud services provider in the People's Republic of China. The company operates in three segments: IT Infrastructure Services, IT Implementation and Supporting Services, and Cloud Services. It is involved in the provision of IT infrastructure, and technical and maintenance supporting services; design of IT solutions; and development and/or implementation of solution-based software and/or hardware products. The company also offers design, management, and technical support for using cloud platforms, which include the self-developed cloud platform and other third-party cloud platforms. The company was founded in 2002 and is headquartered in Shenzhen, China. Edensoft Holdings Limited is a subsidiary of Aztec Pearl Limited.

How the Company Makes Money

Edensoft Holdings generates revenue through multiple streams, including software licensing, subscription services, and consulting fees. The company primarily earns income by selling proprietary software solutions to businesses, which are often customized to meet specific client needs. Additionally, Edensoft offers subscription-based services that provide ongoing support and updates for its software products. The consulting arm of the business contributes to revenue by providing expert advice and technology implementation services, helping organizations transition to digital platforms. Strategic partnerships with other tech firms and service providers also play a crucial role in enhancing its offerings and expanding market reach, thereby contributing to the company's overall earnings.

Edensoft Holdings Limited Financial Statement Overview

Summary

Edensoft Holdings Limited has shown strong revenue growth and improved profitability, with a healthy gross profit margin and a positive EBIT margin. However, low EBIT and EBITDA margins and negative cash flow from operations indicate challenges in operational efficiency and cash management.

Income Statement

Edensoft Holdings Limited showed solid revenue growth of 38.88% in the latest year, with a consistent improvement in net profit margin from previous losses. The gross profit margin stood at a healthy 9.91%, and the company successfully turned a negative EBIT in 2022 into a positive EBIT margin of 1.02% in 2024. However, the EBIT and EBITDA margins remain relatively low, indicating room for operational efficiency improvements.

Balance Sheet

The company maintains a strong equity base, with a debt-to-equity ratio of 0.21, indicating low leverage and financial stability. The equity ratio of 45.88% suggests a balanced capital structure. However, the return on equity has been modest at approximately 4.00%, signaling potential for enhanced shareholder returns.

Cash Flow

Cash flow from operations was negative in recent years, reflecting challenges in cash generation despite positive net income. The absence of free cash flow growth and negative cash flow metrics highlight concerns regarding cash management and liquidity. The company needs to focus on improving operational cash flows relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	856.83M	1.13B	815.33M	680.32M	800.51M	690.72M
Gross Profit	77.43M	112.29M	99.14M	75.56M	102.01M	71.30M
EBITDA	8.50M	11.76M	11.70M	-34.66M	25.80M	23.91M
Net Income	5.72M	8.02M	6.14M	-27.77M	19.43M	16.02M
Balance Sheet
Total Assets	341.06M	437.65M	435.00M	323.26M	376.19M	367.89M
Cash, Cash Equivalents and Short-Term Investments	71.30M	94.59M	20.78M	60.31M	140.84M	105.31M
Total Debt	2.34M	41.29M	55.31M	25.66M	6.30M	7.33M
Total Liabilities	133.49M	236.85M	243.42M	138.13M	167.78M	177.00M
Stockholders Equity	207.58M	200.79M	191.63M	185.13M	208.40M	190.90M
Cash Flow
Free Cash Flow	-56.48M	94.09M	-77.70M	-93.54M	14.35M	35.22M
Operating Cash Flow	-56.40M	94.13M	-77.68M	-93.15M	14.52M	35.65M
Investing Cash Flow	341.00K	319.00K	6.66M	12.15M	5.03M	-24.32M
Financing Cash Flow	-41.46M	-14.64M	22.36M	13.39M	-2.83M	76.24M

Edensoft Holdings Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.13
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1147, the sentiment is Positive. The current price of 0.13 is below the 20-day moving average (MA) of 0.13, above the 50-day MA of 0.13, and above the 200-day MA of 0.13, indicating a bullish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 57.50 is Neutral, neither overbought nor oversold. The STOCH value of 80.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:1147.

Edensoft Holdings Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
1460	61 Neutral	HK$263.28M	15.46	2.96%	3.33%	8.45%	-30.47%
8606	59 Neutral	HK$102.66M	-70.91	-1.95%	―	5.01%	82.54%
1147	55 Neutral	HK$286.29M	23.73	5.44%	1.49%	28.18%	47.50%
8611	47 Neutral	HK$622.44M	-151.06	-57.46%	―	29.99%	-113.64%
8050	39 Underperform	HK$523.51M	201.19	26.16%	―	33.20%	―
8178	37 Underperform	HK$29.26M	-0.26	-37.29%	―	―	―